Labour is putting its faith in business.
That faith is that business will fund it, because it has alienated its membership.
That faith expects that business will deliver growth, which is the pre-condition for all Labour's supposed plans.
The faith is that this will happen without a new Labour government doing anything to change the reasons for business to grow.
That faith is misplaced. Business is not to be trusted, as people know. This is an Ipsos Mori poll from 2022 on who people trust in the UK:
Labour is choosing to trust business leaders, who have 32% confidence in the community. That's better than politicians (12%) and journalists (29%) but way less than trade unionists (48%) or civil servants ((56%), let alone the people Labour is really intent on alienating, including teachers (81%), doctors (85%) and nurses (89%).
I'd like to suggest that Labour is making the wrong choice.
But then I have to ask why they're doing that? Could it be that, just like the Tories, the post-political career is all that they now care about? The choice is hard to explain otherwise, and they are heading for five years in power at most on the basis of the current performance.
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Presumably the “growth” that Labour betting the house to deliver is GDP growth, with all the flaws in measurement that encapsulates – not least, nothing for well being or health or happiness, nothing for domestic work, nothing for the environment, and the nonsense of adding in notional rent for owner-occupiers.
It would be traditional to quote RFK here – “it measures everything in short, except that which makes life worthwhile” – but I’ll add another passage in that speech: “Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things.”
Quite so
Just a reflection of the stupidity of those planning their economic policy – Reeves & Co with input, no doubt, from Cooper (and her half-witted husband).
These ignoramuses really don’t seem to think that government spending can do anything to improve the economy as a whole so are betting the farm on sitting on the coattails of business in the hope that magical growth will somehow suddenly appear from somewhere to provide them with some tax money to spend on the important stuff.
It fully explains the recent scrapping of the £28 billion green spending pledge, for instance. They think that ‘business investment’ in Green tech would be better than government investment without actually understanding that businesses aren’t going to invest £28 billion per annum, unless they think they will get a direct return on it themselves. After all, businesses don’t reap the benefits of the spending multiplier. Reeves & Co don’t seem to think the spending multiplier exists and Starmer doesn’t appear to have the faintest clue about anything to do with economics, so he just does what he’s told by them.
They really are a useless bunch. However, I don’t think they are malicious like many of the Tories, just clueless. Same result, of course.
Thank you, Mariner.
You reckon that they are not as malicious as the Tories. I would not be so sure. They are more subtle, at least in public.
Why is Labour doing it?
Perhaps because they read the Ipsos-Mori poll. Faith in TV newsreaders has actually increased (there are some very odd but striking signs of public cognitive dissonance in the poll). Labour appear to think that if you simply take the word “Tory” out of the public message; the Tory message works perfectly well just the way it is. The medium is the message*. The public will swallow any neoliberal rubbish you care to serve it.
* M McLuhan, (1964). “the medium is the message. This is merely to say that the personal and social consequences of any medium—that is, of any extension of ourselves—result from the new scale that is introduced into our affairs by each extension of ourselves, or by any new technology………………
Such economists as Robert Theobald, W. W. Rostow, and John Kenneth Galbraith have been explaining for years how it is that ‘classical economics’ cannot explain change or growth. And the paradox of mechanization is that although it is itself the cause of maximal growth and change, the principle of mechanization ex- cludes the very possibility of growth or the understanding of change. For mechani- zation is achieved by fragmentation of any process and by putting the fragmented parts in a series. Yet, as David Hume showed in the eighteenth century, there is no principle of causality in a mere sequence. That one thing follows another accounts for nothing. Nothing follows from following, except change. So the greatest of all reversals occurred with electricity, that ended sequence by making things instant.”
Business by itself can not achieve growth because there is not enough money in the economy to enable it to work efficiently. Business can not magic money out of nowhere. The government can.
While I agree with your conclusion, I suspect if more of the profits were spent in better wages and more direct investment, and less was used for buying property, hoarded in savings accounts and speculating in the City-there could be a lot more investment with the existing levels.
I was surprised bankers did so well in the poll !!
Ian
Bankers score highly because it’s usually bad news they tell us isn’t it – ‘You are overdrawn’ or ‘No’.
@ Ian Tresman
“Business cannot magic money out of nowhere. The government can.”
Ah but so influential is the Market Fundamentalist dogma in the UK many people think government can’t deliver anything well relative to the private sector. Abby Innes’s book “Late Soviet Britain” reveals in great detail why this is brain-dead guff!
Strangely in the United States the land of strong belief in market capitalism they understand far better the roles the public sector needs to play!
On a point of accuracy, the Marshall McLuhan quote from a book of that title was “the medium is the massage”, not message. Much more subtle. It was all the rage when I was studying graphic design at Leeds in the 60’s. (And BTW, the president of the University Student’s Union was a certain Mr. Straw).
However, on looking it up I find that, according to them, the word “massage” was a typo, but McLuhan left it because he thought it was better. I never knew that.
Mr Hargreaves,
On a point of accuracy, the quotation is taken from McLuhan’s 1964 book, ‘Understanding Media: The Extensions of Man’; specifically the opening of Ch.1 ‘The Medium is the Message’. The reference to ‘The Medium is the Massage’ is from a later McLuhan book in 1967, presumably a whimsical play on the enormous contemporary impact of McLuhan’s original influential sentence in the first book. It’s effect was worldwide, and instant; viral, on steroids to provide a modern reference.
I should add, I did not provide the title (it was not therefore inaccurate, and you gave the wrong title); and since I provided the literal McLuhan sentence, the ‘medium is the message’, and not ‘massage’ in the exact quotation given; I am t something of a loss to understand your comment.
I stand corrected but also by my later comment that it seems it was a typo in the title of the book. Unfortunately once you’ve posted something in this blog you can’t edit it, Usually I try to get my facts right and proof read it before hitting the “submit” button.
Mr Hargreaves,
My comments are full of typos. I only seem to register them properly after I hit send, and the comment is in moderation; it seems easier to read the comment there (somehow).
Murphy’s Law
I often edit after posting, if you have not noticed. Same reason
I would suggest that we should be grateful for Keir Starmer. Because of his economic illiteracy centred around his mindless acceptance of the right-wing lie the UK state has no money creation powers of its own he’s managed to create a new party out of the Labour Party. This new party should be called the Nu-Paralysis Party. His reneging on virtually everything he says reveals a paralysed brain because he can’t work out where to find the money to fund any major initiative which the country badly needs! But our true thanks for Keir Starmer lies in the fact it can now be seen by anyone who cares to think about it that every single party in the UK is the same a Nu-Paralysis Party!
Perhaps a simpler way of stating matters is that the UK is now infested with “No-Can-Do” parties as far as the major issues that need to be tackled! No point in voting for any of them only a serious collapse of the economy and social fabric will bring people to their senses!
Thank you.
No can do? I dunno. They are happy to do for their donors and future paymasters.
You should have heard them a fortnight ago, moaning about UK pension funds and individuals being risk averse, “so unlike Americans”, and perhaps needing to be coerced into stock market investments, music to the ears of the CEO of Killik & Co stockbrokers as he anticipated the uptick in transaction fees.
Thank you and well said, Richard.
From 2007 – 16, regulatory and trade policy around the world, and, from last autumn, regulatory policy, I’m stunned by Labour’s infatuation, especially the second time round. I’m not the only socialist in the City and who thinks this is misplaced and will come back to bite Labour.
The public is correct to distrust business, at least the City, and would be surprised at how Labour abases itself in private with business.
At least, the City knows it’s not trusted, which is why it said relatively little in the Brexit referendum campaign.
Labour’s idea of business is limited to banks, really big banks, and investment firms, really private equity, and loud mouths like Alan Sugar. who I have come across in my first stint, and the CEO of Iceland*, which is owned by his family. Labour does not care for small business, metal bashing, social enterprises etc. *He ssupported Brexit as he thinks it’s the EU stopping him from paying staff more, but he hasn’t raised their pay since the UK left the EU, but no one tackles him about that.
The Labour in the City network includes people in PR, the NGO complex, professional services. There are few traditional City types there. They probably think that the likes of Robin Stafford, John Laybourn and I are either fakes or heretics.
Thanks
My friend Tim Bush gave up in them a long time ago.
Thank you, Richard.
I should have addressed Richard’s conclusion.
I think yes and add it’s not just the politicians, but civil servants and media, too, and not just in the UK, but in the EU and US, too. The system is corrupt.
I was stunned how many career civil servants and special advisers jumped ship from Whitehall, European Commission, EU presidency, Federal Reserve, US Treasury for big banks and lobbyists in the years after 2008. Some join big banks for some years and then a more relaxed life at a lobbyist or think tank. Some people may misinterpret this private sector career as business experience, but few meet a real entrepreneur or wish to.
The likes of Streeting, Sanna Marin, Jacinda Ardern, Macron see some years mid career in politics as a stepping stone to big money in business, the lecture circuit, tv talk shops etc.
With regard to the media, readers may be stunned how many leading talking heads, especially at the BBC, have other jobs, rarely declared, and make much more moderating events, speaking at events, voicing over corporate communications, edit corporate publications etc. They are not likely to give these paymasters a hard time, but will, for example, happily character assassinate commies, or so they reckon, like Corbyn. These outside jobs often become full time portfolios or at lobbyists and PR firms.
Your last point is very relevant
This is intensely lucrative for people like Today programme presenters
Thank you, Richard.
You are right to highlight Today.
It also explains why you are rarely on air. It would not surprise me if you are on a grey list, not necessarily written.
I was told I was at one time – for being ‘anti-business’
That passed, but I am rarely called these days
Hey, ho
There is nothing especially new in all this (there were smooth, urbane, professional lobbyists in the 60s/70s), it was there pre-crash; but perhaps you have to spend some time in London or have even a slight knowledge of the circular, revolving door circuit (financial sector, Services [PR/Consultancy and their vast, endlessly metamorphosing offspring- including lobbyists/think tanks – all largely the same thing], Government, and the oily lubricant of communications for it all – media/Press) simply to notice the machinery:
the unseen metaphorical portrait of our very own political Dorian Gray.
Thank you, John.
I had no idea of the scale and incestuousness and even their ignorance until 2008. Working in London, but Brussels and Washington, too, was a revelation.
Being wined and dined in Mayfair clubland by the likes of Bell Pottinger was revealing and not unenjoyable.
The Labour in the City network are certainly “smooth, urbane, professional lobbyists”. One of them now sits for Selby and Ainsty, a protege of and former adviser to Streeting. There are many more to come, especially from the Streeting camp. The Liberals and SNP are just as bad.
You are right to highlight the revolving door. It’s often pillow talk, e.g. Laura von (sic) Kuenssberg and her McKinsey hubby James Kelly*, receptions, the best being the Spectator’s, and festivals, the best being Ross on Wye, Cornbury and Kenwood House, too. *Kelly was seconded from McKinsey, one of many, to the cabinet office as an adviser during the coalition.
“how many leading talking heads, especially at the BBC, ……………make much more moderating events,”
see them in Brussels @ “industry”/conference events etc …all the time, smooth, polished, well spoken, brainless.
The Bx con ference circuit is designed to confirm policy – not discuss it (right or wrong). Dissenting voices, never, all questions pre-moderated via Slido. Last time I went to a good event was pre-Covid – a Politico meeting. One of the talking heads failed to turn up and instead the floor was opened to questions etc. What followed was more like a boardroom meeting – a discussion. I said to Politico “why not hold more like that?” – then Covid got in the way.
Thank you, Mike.
We are in the hands of nothing but a gravy train.
Sickening but how for much longer?
Thank you, PSR.
I think, unfortunately, many more years.
From acquaintances and more outside the west, there’s a feeling that much of the sabre rattling and worse is to divert attention from the predations of neo-liberalism and the gravy train that benefits from this pathology.
You are standing patiently in a long queue, in anticipation of a product that isn’t actually made by anyone; oh, and the shop closed, long ago.
I concede that Peter Mandelson is right. Labour do need to woo the public to make sure that they do win an election. They aren’t at the moment.
I also concede that Jon Cruddas’ words look accurate when he labelled labour as right wing and illiberal.
I can’t see what part of the electorate wants “Business first”.
On the basis of the chart does this mean (tongue firmly in cheek): “I’m an engineer – you can trust me” —- & people will?
The chart should be (it won’t) chastening for politicos (trusted less than ad execs!! & estate agents). Showing that as commented beforte – people are powerless in the face of a political tribe which are both mendacious and shameless, both with respect to their mendacity and their incompetance.
Adding to Colonel Smithers comments: the Bx lobby sector is incestuous, smooth, brainless and habitually avoids inconvenient facts. The ones commenting/lobbying on technical matters are little better than performing chimps -following the orders of assorted organ grinders. Sad & pathetic by turns. Commission, is no better (DG Energy being a particular black hole of ignorance/prejudice).
Thank you, Mike.
I tended to deal with financial services, trade and internal markets.
I have a wide range of contacts in the Commission. (Comp, Energy, Grow, CNECT (the IT mob), etc…)
Most of them I class as “mates” = high level of mutual trust. All of them, all of the time, wonder what the hell is going on.
The younger ones are worried/frightened, the older ones are … not making this up…..building retreats for when things go very badly wrong.
None of them have a clue on “how to change the course of the ship”.
Having originally done engineering, I’m happy with that table!
More seriously, I struggle to see Starmer/Reeves’ rationale over the announcements on the City and the £28bn. I suspect they are linked. Is it:
– Pure pandering to the City, who would rather go on maximising fossil profits? And minimise their taxes.
– Pandering to Red Wall voters who think going green threatens their jobs?
– Reeves’ economic orthodoxy meaning that she really does not get the impact of climate change?
There have been quite a few leading business voices expressing their disappointment with Labour backing off green expenditure, and not just for reasons of self interest. They know it needs to happen and it needs public investment to take a lead. As happened with wind.